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Sanctions Warranted for Defendant’s “Purposefully Sluggish” Discovery Efforts and Failure to Produce “Usable” or “Reasonably Accessible” Documents

Posted in CASE SUMMARIES

In re Seroquel Prods. Liab. Litig., 244 F.R.D. 650 (M.D. Fla. 2007)

In this opinion, United States Magistrate Judge David A. Barker considered Plaintiffs’ motion for sanctions based on the failure of defendant AstraZeneca (“AZ”) to timely comply with various discovery obligations.

In April 2007, Plaintiffs had filed a motion to compel completed production of various items listed in the case management order (“CMO”) entered January 2007.  (For a summary of the related opinion discussing the CMO, click here).  The motion was denied without prejudice by the court, to allow the parties to confer “in good faith and in extenso” on the issues raised in the motion to compel.   At the same time, the court scheduled an evidentiary hearing on the motion, warning the parties:

ANY PARTY WHOSE CONDUCT NECESSITATES THE EVIDENTIARY HEARING SHOULD EXPECT THE IMPOSITION OF SANCTIONS FOR ANY UNREASONABLE OR INAPPROPRIATE CONDUCT OR POSITION TAKEN WITH RESPECT TO THESE MATTERS.

(Capitals and bold in original.)

The evidentiary hearing was ultimately canceled after the parties filed a Joint Statement of Resolved Issues and Notice that a Hearing is Not Required.  Plaintiffs agreed to the Joint Statement and Notice based on AZ’s representations that it would correct the faults described by Plaintiffs in their original motion to compel.  When the corrections were not made, Plaintiffs filed this motion for sanctions.

In arguing against sanctions, AZ relied heavily on the fact that the court had not granted the Plaintiffs’ original motion to compel nor ordered Defendant to produce certain documents.  The court rejected the argument as “disingenuous,” noting that the only reason the motion to compel was not decided upon, and that the corresponding evidentiary hearing not held, was due to AZ’s representation that they would correct the alleged deficiencies of their production raised in the motion.  The court also pointed out that although denied, the Plaintiffs’ motion to compel gave AZ notice of the discovery conduct about which Plaintiffs had complaints.  Similarly, the court found that the warning it had included in bold and all caps in its original notice scheduling the evidentiary hearing gave AZ more than sufficient notice of the possibility of sanctions should they fail to resolve those issues.  It continued:

A party will not be permitted to gain an advantage by agreeing to cure the discovery violation, then fail to implement the cure, and hope to avoid a sanction by forestalling the sanctions ruling. AZ’s stipulation to resolve the discovery issues, under threat of sanctions for obstreperous behavior, does not preclude the Court from sanctioning it under Rule 37 under the circumstances of this multi-district case.

The court then reviewed the four discovery failings enumerated by the Plaintiffs, to determine whether any warranted sanctions.  While finding two of the acts were not sanctionable because they represented mere oversight or excusable neglect, the court found that AZ’s failure to adequately identify relevant databases and persons knowledgeable about the databases violated the CMO entered by the court, and was sanctionable under Rule 37.

Identifying relevant records and working out technical methods for their production is a cooperative undertaking, not part of the adversarial give and take. … It is not appropriate to see an advantage in the litigation by failing to cooperate in the identification of basic evidence.

The court found that sanctions were also warranted by AZ’s “purposely sluggish” production to Plaintiffs.  Citing decisions from the Ninth and Second Circuits discussing the presumed prejudice created by unreasonable delay, the court noted that AZ’s sluggishness had benefited AZ and prejudiced the Plaintiffs by limiting the time available to Plaintiffs to review and follow up on information.

The court noted a number of specific failings by AZ, including:  the use of a plainly inadequate key word search, the failure to provide attachments, and the omission of relevant emails, and what it described as “woefully deficient” efforts in preventing and solving technical problems – which included the production of a large number of blank pages, load files that were not searchable, and the absence of page breaks arguable required by the CMO.  While AZ blamed many of the technical problems on vendor error, the court cited the Sedona Principles, which state that a party is responsible for the errors of its vendors.  Furthermore, the court concluded that without the requisite quality control oversight, such problems were inevitable.  In addition, it found that many of the issues could likely have been resolved much sooner had AZ cooperated by allowing consultation between the technical staffs of the parties.

The court concluded by finding that AZ’s failure to timely produce “usable” or “reasonably accessible” documents warranted sanctions.  Because it was unable to determine the appropriate sanctions, the court stated the Plaintiffs would be allowed to present further evidence and argument regarding the prejudice or damages they suffered as a result of AZ’s sanctionable conduct.